Durbin, Schakowsky Introduce Legislation to Increase Competition and Lower Costs in Medicare Part D

[WASHINGTON, D.C.] – During a week that marks both the 25th anniversary of the Americans with Disabilities Act and the 50th anniversary of Medicare, U.S. Senator Dick Durbin (D-IL) and U.S. Representative Jan Schakowsky (D-IL) are introducing legislation that would increase competition and help lower drug costs for seniors and persons with disabilities who are enrolled in the Medicare Part D prescription drug program.


“For fifty years, Medicare has been not just a safety net, but a lifeline for millions of Americans,” Durbin said. “The bill I am introducing with Representative Schakowsky would build on that legacy by lowering costs for prescription drug plans under Medicare Part D. Introducing more competition for plans, and giving Medicare the authority to negotiate on behalf of its beneficiaries is the right prescription for real savings on drug prices for America’s seniors.”


“When I talk to families in my district and across the nation they often tell me they are struggling to pay for the prescription drugs they need,” Schakowsky said. “Our legislation provides an alternative to the unchecked private prescription plans in Medicare Part D. Seniors and people with disabilities could choose a public plan offered by Medicare that would not only cost less, but would free them from having to deal with private plan changes during annual Part D enrollment time. This legislation has the potential for enormous savings to Medicare beneficiaries, and it would also reduce our country's deficit.”


The Medicare Prescription Drug Savings and Choice Act would create one or more Medicare-administered prescription drug plans to compete with the expensive, privately administered prescription drug plans currently offered under Medicare Part D. The bill would also require the Secretary of Health and Human Services to negotiate lower drug prices. 


The legislation would help protect seniors and individuals with disabilities by providing an alternative to the confusing private prescription drug plans, marketing practices, and formulary changes that have made deciphering among Part D plans very difficult.  The prescription plan – or plans – administered by Medicare would not eliminate the private plans that are currently offered but, by providing competition, would put downward pressure on the drug costs in private plans as well.


Key provisions of the Medicare Prescription Drug Savings and Choice Act:


  • The Medicare-operated drug plan(s) would be available nationwide with a uniform monthly premium.


  • The Secretary would negotiate with drug companies on the prices of drugs provided through the Medicare-operated drug plan(s).


  • The Secretary would be required to create a drug formulary for the Medicare-operated drug plan(s) that promotes safety, appropriate use of drugs, and value.


  • The Agency for Healthcare Research and Quality would assess the clinical effectiveness and safety of drugs and recommend drugs that should be included on the formulary.  Drugs listed on the formulary could not be removed during the year except in the case of safety concerns; however, drugs with clinical benefits could be added.


  • For drugs that provide similar benefits, the formulary would use incentives (such as lower co-payments) to encourage Medicare beneficiaries to choose the drug for which the Secretary of HHS was able to negotiate the lowest price.


  • An Advisory Committee would review petitions and make recommendations on whether to add drugs to the formulary.


  • An appeals process would be established that is efficient, imposes minimal administrative burdens, and ensures timely procurement of non-formulary drugs or non-preferred drugs when medically necessary.

The legislation is co-sponsored in the Senate by U.S. Senators Sheldon Whitehouse (D-RI), Jack Reed (D-RI), Sherrod Brown (D-OH), Angus King (I-ME), Tammy Baldwin (D-WI), and Mazie Hirono (D-HI). The bill is co-sponsored in the House of Representatives by U.S. Representatives Jim McDermott (WA-07), Sam Farr (CA-20), Raul Grijalva (AZ-03), Yvette Clarke (NY-09), Diana DeGette (CO-01) and Chellie Pingree (ME-01).

The Medicare Rights Center, the Center for Medicare Advocacy, and Justice in Aging have also endorsed the legislation.